True or False: Sales tax at auctions with a buyer's premium is calculated on the bid price alone.

In the context of auctions involving a buyer's premium, the sales tax is applied not just to the bid price but also includes the buyer's premium. This means that when calculating the total sales tax owed by the buyer, both the bid amount and any additional fees such as the buyer's premium must be included in the calculation.

For instance, if an item is bid up to $100 and there is a buyer's premium of 10%, the total purchase amount would be $110. Sales tax is then applied to this total amount, ensuring that the government collects tax revenue on the complete transaction rather than just the initial bid.

Thus, it is essential for auctioneers and bidders to recognize that the buyer's premium is a part of the taxable amount to ensure compliance with sales tax regulations and accurate financial calculation during the auction process.